Netflix reported massive subscriber growth this week, putting to rest fears after its rocky second quarter. The company added 6.8 million new subscribers in the last few months, according to The Hollywood Reporter. This brings its total number up to 158 million subscribers.
Netflix announced its new numbers on Wednesday, to the delight of shareholders. About 520,000 subscribers reportedly came from the U.S., with the other 6.3 million coming from abroad. In a letter to shareholders, Netflix credited the growth with smart content decisions.
"As we’ve improved the variety, diversity and quality of our content slate, member engagement has grown, revenue has increased, and we’re able to further fund our content investment," it read.
The figure was still a little shy of the 7 million new subscribers Netflix projected at the beginning of the third quarter, but it was close enough to make shareholders happy. It also allowed them to breathe a sigh of relief after the company's second quarter flop.
Back then, Netflix had projected 5 million new subscribers, yet it ended up with just 2.7 million. On top of that, it lost 130,000 existing subscribers in the U.S. The result was an abrupt $17 billion drop in value, as many figured the company had finally peaked. The 10 percent stock price drop has held steady, and shares are reportedly trading down about 20 percent from July's disclosure.
Netflix has proven that that is not the case, in spite of all the outcry over show cancellations this summer.
"Since our U.S. price increase earlier this year, retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower US membership growth," the letter went on.
The release of Stranger Things Season 3 undoubtedly helped Netflix hit its higher goals this quarter, as did other big titles. For the fourth quarter, Netflix has set an even more ambitious goal of gaining 7.6 million new subscribers, leaning on the strength of a new season of The Crown.
The Crown Season 3 is not a sure thing either, as it will see a casting overhaul. Queen Elizabeth II will now be portrayed by Olivia Colman, and feature some of the 20th century's biggest moments. Still, Netflix is hanging a lot of hopes on fans getting accustomed to the new ensemble.
This quarter will also see the release of two original films on Netflix -- The Irishman and The Two Popes. The former is directed by Martin Scorcese and stars Robert de Niro and Al Pacino. It has been a hit on the film festival circuit recently.
Of course, this quarter will also be Netflix's first in competition with new streaming competitors Disney+ and Apple TV+. The company's letter noted that it is not worried about the so-called "streaming wars."
"Many are focused on the 'streaming wars,' but we’ve been competing with streamers (Amazon, YouTube, Hulu) as well as linear TV for over a decade," it said. "The upcoming arrival of services like Disney+, Apple TV+, HBO Max and Peacock is increased competition, but we are all small compared to linear TV. While the new competitors have some great titles (especially catalog titles), none have the variety, diversity and quality of new original programming that we are producing around the world."